2025 Solar Incentives Guide for Henderson, KY - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Henderson?

Source: https://www.dsireusa.org/

Solar incentives are intended to encourage people to switch their home over to renewable energy by offering financial incentives that lower the burden of solar panel installation and use. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are offered by the state of Kentucky or your specific utility company, county or municipality. Types of solar incentives might include:

• Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions let you exclude the value that your solar panels add when you calculate how much property tax you need to pay on your house.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you have in place a net metering agreement with your Henderson utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some areas, this is a dollar-for-dollar credit, while in others you may receive a refund equivalent to a percentage of the value.
• Rebates: Solar rebates might be offered by your local utility company, or by your state or county. These rebates work as cash back that is applied after you pay for solar panels and before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have heard of. An incentive many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a certain percentage of the cost of your solar system.

The ITC applies to the total cost of solar panel installation, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.

Your local Henderson solar panel installation expert can give you more information about the ITC and how it applies to your situation.

In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. Homeowners can now qualify for a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. The percentage will then decrease yearly until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.

Click here to learn more about the new Inflation Reduction Act. Your local Henderson solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Similar to federal incentives, these can include tax credits, rebates and more. Some incentives are ongoing, while others are only available for a limited time. Solar incentives might be given by the Kentucky government, or by your county or municipality.

Next Steps for Installing Solar in Henderson

The large number of solar incentives available has enormously increased the adoption of solar energy nationwide over the past 15 years. You might qualify for solar incentives from your local utility company, the Kentucky government or the federal government. Speak with your local solar panel installation expert today to find out more information and to save as much money as possible on solar panels for your Henderson home.